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Indian defence manufacturing is inching up

As India pushes for defence indigenisation through ‘Make in India’, Rahul Chaudhry, Chairman of Defence Innovators & Industry Association (DIIA) & CEO of Tata Power SED, explains to BusinessLine as to how that has led to frugal engineering and vendor development to accommodate MSMEs. Excerpts:

Where does India’s defence innovation stand in the global scene?

India currently procures 70 per cent of its defence equipment from abroad. A major reason for the high level of import is that India’s defence industry has not been able to produce competitive indigenously designed weapons. However, it is important to note that it is not out of the lack of faculty for developing capabilities but for the lack of structural support required from the government in its role as a market-maker.

How have initiatives such as ‘Make in India’ impacted defence manufacturers and service providers?

‘Make in India’ is vision. Its implementation will not be as effective as its articulation.

But still it would push us closer to indigenistion and the overall environment created by it will inevitably redirect some orders to the Indian industry.

What is the innovation scene in defence manufacturing at present in India?

The Indian industry realises and values the merits of investing R&D.

However, it cannot risk its shareholders’ capital on creating new technologies that the government may not buy. That said, many from the industry have made bold moves and invested in substantial R&D and it has worked.

Our capabilities have been recognised the world over. When it comes to R&D in defence, the DRDO has held the fort for a long time now.

Bringing in SMEs and private sector players as junior partners in defence R&D would help DRDO enhance both their ‘know- how’ and ‘know-why’ in terms of product innovation and quality.

How are Indian companies leveraging strengths in IT? What kind of innovation is expected to drive it next level?

Indian IT companies have immense strength and have done well for themselves by leveraging their business potential well.

Their contribution to the Indian GDP has been substantial and have created lakhs of jobs over the last decade or so. However, the global IT market and market requirements are changing, especially after the advances in artificial intelligence and machine learning. We need to catch up with these advances and enhance our capabilities to stay competitive. Not doing so would mean erosion of billions of dollars from our GDP and a massive loss of jobs in the industry.

How is Tata Power SED strategising innovation relevant for India?

Tata Power SED has been at the forefront of indigenisation of defence in India. We were the original partners of APJ Abdul Kalam for the indigenous guided missile programme.

Since then, we have been proactive about in-house development of indigenous technology. Tata Power SED, in fact, happens to be the only Indian private sector company to have won a ‘Buy (Global)’ bid against foreign suppliers and be selected as Development Agency for both the ‘Make in India’ programmes – Tactical Communication System (TCS) and the Battlefield Management System (BMS).

We strategise our investment in R&D in such a way that we aggressively pursue design and development to create technologies and innovations that are multi-purpose and can be used in many different programmes. The strategy aims to leverage our capabilities in systems engineering, our Indian brand of frugal yet substantive engineering and the shortage of funds for investment in the defence business.

What will be the future of vendor development programme undertaken by a majority of the defence PSUs?

National Vendor Development Programmes are organised by PSUs such as BEL, HAL and BHEL for MSME and private sectors.

The objective is to create a platform to bring together PSUs and defence units to share their vendor selection procedures for procurement.

MSME development institute also organises vendor development programmes on a regular basis. Vendor development has to be a strategic process that entails building a community of industrial units and industrialists than just a technical process of selecting the most affordable vendor.

This way, the vendor base will exist in the face of short-term market forces and be available in times of dire need for the country.